A district court in Kiev Oblast has accepted a lawsuit which is setting a precedent in Ukraine. The plaintiff seeks compensation in bitcoin for “moral damages” caused by law enforcement officials. A preliminary hearing has been scheduled after the presiding judge found no legal grounds to reject the claim.

Also read: Lawsuit Challenges Google’s Ban on Crypto Ads in Russia

Setting a Precedent

For the first time in Ukraine’s judicial practice, a claim for compensation in cryptocurrency has been accepted by a local court. Ukrainian citizen Dmitriy G. wants to be paid 1 BTC for “moral damages” he suffered in result of an “unlawful” search. He is suing officers from Ukraine’s Security Service (SBU) and their colleagues from the Prosecutor’s Office who conducted the operation.

Borispolskiy Court’s decision (Forklog)

Borispolskiy District Court in Kiev Oblast has agreed to look into the case and has even scheduled a preliminary hearing, Forklog reports. Judge Zhuravskiy found no legal grounds to reject the lawsuit, according to a document, acquired by the outlet.

All applicable norms have been observed, according to the court, which has already sent a copy of its resolution to the defendants. They have 15 days to respond officially to the claims made by the plaintiff. If the government agencies fail to do so, the court proceedings will continue based on the available information.

Regardless of the end result, the legal action has already set a precedent in Ukraine’s court practice. If Dmitriy is granted the bitcoin compensation he seeks, that would de facto legalize cryptocurrencies as means of payment in the country.

Bitcoin in Legal Limbo

Technically and legally, the status of cryptocurrencies in Ukraine is still undefined. At least three drafts have been introduced in parliament since last October. One of the bills defines cryptocurrency as property that can be exchanged for goods and services. Another one states that cryptos are financial assets. A third, supplementary draft amends Ukraine’s tax code to introduce exemptions for crypto profits and incomes. No real progress towards the adoption of new legislation has been reported in 2018.

There have been multiple calls, including from officials and institutions, for the regulation of cryptos, like bitcoin. A cybersecurity meeting in January discussed cryptocurrencies and the National Security Council set up a working group tasked to finalize proposals. Ukraine’s Cyberpolice also called for the legalization of cryptocurrencies.

Earlier, the country’s justice minister Pavel Petrenko stated that digital currencies should be brought into the legal field. The State Financial Monitoring Service has already announced its official position on cryptocurrency matters. Ukraine’s parliament, however, has made no significant advances towards adopting a comprehensive regulatory framework.

Some statements suggest that Ukrainian legislators may separate crypto mining and cryptocurrencies in the new legislation. Mining can be legalized in the country before decisions are made in regards to the status and the circulation of cryptos. Recently, Ukraine’s Minister of Economy ordered several ministries and agencies to prepare the documents necessary to add crypto mining to the state register of economic activities.

Do you think similar cases can effectively legalize bitcoin even before dedicated legislation has been passed by lawmakers? Share your opinions in the comments section below.

Images courtesy of Shutterstock, Forklog.

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